This really helps understand what our irresponsible elected representatives have been doing with the federal budget.

Kinda makes you laugh at the pathetic attempt they've made to "make things right."

October 5th, 2011, 5:04 pm

TheRealWags

Megatron

Joined: December 31st, 2004, 9:55 amPosts: 12534

Re: National Debt and Budget Cuts in Perspective...

Would you happen to have any source? Just a bit skeptical/cynical when it comes to email 'facts' is all

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October 5th, 2011, 8:15 pm

Blueskies

QB Coach - Brian Callahan

Joined: September 13th, 2007, 12:43 pmPosts: 3121

Re: National Debt and Budget Cuts in Perspective...

Those numbers look accurate to me.

One idea though that I've recently fully grasped is that it is literally impossible for the government to pay off its debt.

How so?

Well, when we came off the gold standard, every dollar became fiat--a form of debt.

Every dollar in existence is a number on the Fed's balance sheet--its liabilities. The dollar is literally a debt note owed to the Fed.

Most of those dollars have come into existence by the Fed loaning them to the US government. Most of the US government's debt is owed to Fed, and the debt that isn't, is just a claim on another dollar thats indirectly owed to the Fed by the government.

So, if the US government were to theoretically pay off all its debt, there would be no money supply left. Moreover, it would actually be impossible to do, because everytime the government paid off more debt it would be reducing the money supply and making it harder to pay off the existing debt. If the government paid off all its debt there wouldn't be any more dollars in existence.

Wags, the numbers that wjb provided from the email are close. I saw it several months ago and they were based upon projections. The actual numbers turned out to be a little lower on the deficit side ($1.3T vs. $1.65T), but it's a fair analogy of what this country faces.

Blueskies, with all due respect, that was one of the most ridiculous posts I've ever seen. You do realize that there's less than 1 trillion "actual" dollars in circulation, don't you? The GDP is $15T, the government spends $3.5T, and the American people pay over $2T in taxes every year. All of this is done with less than $1T of "real" money.

It's all "fake" money no matter who holds it. If you transfer it between the Chinese, US, or the Fed, it doesn't matter. The same $1T will still be in circulation since the debt transfers won't involve an exchange of "actual" money.

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October 6th, 2011, 2:10 am

wjb21ndtown

Re: National Debt and Budget Cuts in Perspective...

TheRealWags wrote:

Would you happen to have any source? Just a bit skeptical/cynical when it comes to email 'facts' is all

I didn't take it as a "factual email," but rather a break down and new perspective of what was already known. I knew the numbers were pretty good before I posted them... Down to petty fractions of billions and trillions anyhow...

October 6th, 2011, 12:04 pm

Blueskies

QB Coach - Brian Callahan

Joined: September 13th, 2007, 12:43 pmPosts: 3121

Re: National Debt and Budget Cuts in Perspective...

Quote:

Blueskies, with all due respect, that was one of the most ridiculous posts I've ever seen. You do realize that there's less than 1 trillion "actual" dollars in circulation, don't you? The GDP is $15T, the government spends $3.5T, and the American people pay over $2T in taxes every year. All of this is done with less than $1T of "real" money.

It's all "fake" money no matter who holds it. If you transfer it between the Chinese, US, or the Fed, it doesn't matter. The same $1T will still be in circulation since the debt transfers won't involve an exchange of "actual" money.

When you pay back the Fed you destroy the base money supply. About half the debt is owed to the Fed, therefore you can never pay back the debt.

October 6th, 2011, 8:44 pm

Blueskies

QB Coach - Brian Callahan

Joined: September 13th, 2007, 12:43 pmPosts: 3121

Re: National Debt and Budget Cuts in Perspective...

Here, maybe this guys explanation makes a bit more sense:

We can't just cut the deficit and payoff the debt. We must also reform the monetary system. They are interlinked issues.

I can shoot down most of what Maloney said with two words - Wealth Creation.

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October 26th, 2011, 10:23 am

wjb21ndtown

Re: National Debt and Budget Cuts in Perspective...

When you shrink the "money supply" don't you also bolster the value of the dollar? (i.e. make imports like oil, etc. cheaper?) I wouldn't mind having a stronger dollar. I can't stand that everything costs double in the UK and most of Europoe because the dollar is so weak.